Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some...
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Accounting
Pab Corporation decided to establish Sollon Company as a wholly owned subsidiary by transferring some of its existing assets and liabilities to the new entity. In exchange, Sollon issued Pab 32,000 shares of $6 par value common stock. The following information is provided on the assets and accounts payable transferred:
Cost
Book Value
Fair Value
Cash
$
44,000
$
44,000
$
44,000
Inventory
76,000
76,000
76,000
Land
79,000
79,000
109,000
Buildings
175,000
134,000
249,000
Equipment
90,000
76,000
121,000
Accounts Payable
63,000
63,000
63,000
Required: a. Prepare the journal entry that Pab recorded for the transfer of assets and accounts payable to Sollon. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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